mail-order business

mail-order business, method of merchandising in which the seller’s offer is made through mass mailing of a circular or catalog or through an advertisement placed in a newspaper or magazine and in which the buyer places an order by mail. Delivery of the goods may be made by freight, express, or parcel post on a cash-on-delivery basis. Retail mail-order selling was developed primarily for rural customers, but it now includes millions of customers in urban areas.

Most mail-order businesses have been small specialty firms selling by the traditional method, but department stores also do a significant volume of business through their mail-order divisions. Most mail-order volume, however, is accounted for by a few firms selling general merchandise lines. The largest in the world in the late 20th century were Sears, Roebuck and Company and Montgomery Ward & Company, both American firms. With the development of computerized mailing lists and techniques after about 1960, many large retailers combined mail-order circularizing with billing. Book and record clubs utilized direct mail to play a major part in the marketing of books and phonograph and tape recordings.

Mail-order operations have been known in the United States in one form or another since colonial days, but not until the latter part of the 19th century did they assume a significant role in domestic trade. The completion of the continental rail network gave impetus to the development of general merchandise mail-order houses. The ability to sell a variety of merchandise to farmers, at comparatively low prices, a postal rate structure that encouraged the dissemination of mail-order papers and catalogs, and the establishment of the parcel-post system in 1913 all contributed to the expansion of mail-order operations.

Mail-order business emerged in Europe at the end of the 19th century, but its greatest development was after 1945. In the mid-1970s it was strongest in Great Britain, West Germany, Sweden, and Switzerland and was developing in France and the Netherlands. In Germany and France the tendency has been to specialize in a limited range of commodities such as textiles, cigars, or jewelry, but in Great Britain mail-order houses sell a wide variety of consumer durables under well-known brand names. The growing homogeneity of consumer tastes has encouraged European stores to expand internationally; e.g., Great Universal Stores Ltd. of Great Britain has subsidiaries in Switzerland and South Africa.